Why Invest in Commodities Anyway?

Barron's Jack Otter and Brendan Conway discuss the plunge in gold and silver, plus best ways to get exposure to hard assets - if you want them at all.

This transcript has been automatically generated and may not be 100% accurate.

I ... the ... price of gold from its we're asking the question should you really be invested in commodities at all on Jack Otter Editor Barron's dot com ... I'm here with Brendan Conway who writes our focus on Funds lot of course you been all over the commodities market gold silver is it's been plummeting ... I used to listen museum is over market the latest way to get your metal sticks ... I wanna get to that quickly and then just talk about the broader issue of ... of what investors are to make of this mess so sober lesson is sure Jackson ... and in good times the price of solar is snowing ... heavily Credit Suisse's come out with with with the new exchange traded note ... the practice of which essentially is to give you a lot of silver exposure but also uses an options strategy to provide income stream of income by his selling call options this week one of the knocks on holding metals is that in a ... middle distance to the metal ... doesn't have the investing activities of a stock pot ... note international earnings ... so this tends to compensate for that by selling options ... This and trade offs there one of which is that you know if the price of silver stores hire ... you effectively sold some of your upside on investor the right now people probably on word about all the UPS islands of Martinique ... but here's the general question we get to do ... so as an individual investor ... you know when commodities are going up it looks great China's Couvering everything on making money but then days like last week captain and then earlier this week so what's that individual best to do do you recommend exposure to commodities are all ... getting the check I was honestly the answer is maybe ... the reason I say me the uses its policy ... of ... times you hear people telling you should own monies to diversify ... the troubled Vanasek commodities often do you know move the stock market at the moment you most need to be diversified ninety seven with the financial crisis ... are not protected ... one argument I could see for owning them is that the dude give you something of a hedge against inflation ... not a major issue right now but it could be you know ... it devalued dollar falls mean obviously out there I was going on ... I'd be a great investor Jeremy Grantham has made the case that we may have a once in a lifetime trading ... should in fact it's been factors a bubble in China should first ... obviously demand for commodities would plummet ... prices would plummet ... and he thinks that that would give people an opportunity to get in on a very long term is the kind things into the center is a very long-term bull market in commodities ... so let's say I like inflation are kinda like Grantham argument I want to get and ... how to do it ... he inject its ... top of the small time investor because I complain alot Commodity Fund ... tracks the futures market ... the futures are trading if you buy the stock were fun ... to just holding at ... the futures market is is constant sharing basically and how ... how that works in of itself is different from ... him the spot price of oil for instance ... by phone that I would argue it has a broad range of lot different types of muffins or he might even go to the stock market in by you know of of of the fun ... the kids to stocks ... but stocks in companies of business ... great thanks very much and thanks to ... thank you for watching ...